You would have to either pay quarterly estimates and/or use another withholding source such as increasing wage withholding or from a pension or SS benefits if you are retired and receiving such payments. Withholding is preferable because it is applied equally throughout the year regardless of when the withholding is done, while estimates are only credited to the quarter in which you paid them, therefore if you did not pay an estimate by 4/15, you might owe a penalty for the first quarter if you do not meet your safe harbor for tax payments. Your safe harbor is the lesser of 100%/110% for higher incomes of your 2023 tax liability or 90% of your 2024 tax liability.

If you decide on quarterly estimates, you could still avoid a penalty on the first quarter if you fall short of your safe harbor amount if you file Form 2210 AI (annualized installment method) in which you break down your income and deductions by quarter. On that form the conversion falls in the second quarter and would not contribute to a first quarter penalty. But this form is a hassle, so you may not want to use it.

Finally, if you want to avoid estimates, you could withhold from the IRA distribution and within 60 days replace the withheld amount by writing a check as a rollover contribution to the Roth IRA. You would still have a full conversion, but the withholding would have eliminated the need to pay estimates for the remaining quarters. Of course, all this is subject to your overall tax situation, of which the conversion is only a portion.

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